Espresso: everything you need to know about ESP

What is Espresso?

Espresso is an infrastructure network that helps rollups determine the order of transactions. A rollup is a scaling solution built on top of a blockchain such as Ethereum. Instead of executing each transaction directly on Ethereum, a rollup first processes transactions on a separate layer and then publishes a summary on the Ethereum blockchain. This makes transactions cheaper and faster.

Within such a rollup, it must be determined in which order transactions are processed. That order is important because it can affect prices, liquidations, and the outcome of certain operations. Many rollups use a single central party for this, a so-called sequencer.

Espresso tries to decentralize that process. Instead of a single party determining the order, Espresso lets a network of validators collectively reach consensus on which transactions come first.

For end users, Espresso works primarily behind the scenes. You don’t use the network directly, but it can make rollups less dependent on a single central party and enable them to collaborate more effectively.

How does Espresso work?

Espresso functions as a shared sequencer network. A sequencer determines the order in which transactions are processed. In fact, Espresso is also a sequencer, but in decentralized form. Instead of a single party determining the order of transactions, a network of validators does so collectively.

These validators use their own consensus mechanism called HotShot. This mechanism is designed to quickly reach agreement on the order of transactions. Once consensus is reached, rollups can use that order to build their blocks.

The main advantage of this is coordination. If multiple rollups use the same transaction sequence, they can communicate with each other better. This is especially relevant for cross-rollup applications, where assets or messages move between different networks.

The ESP token

ESP is the token of the Espresso Network.

The token is used within the network’s proof-of-stake mechanism. Validators stake ESP to participate in determining the transaction sequence. By doing so, they help secure the network and order transactions. In return, validators can receive rewards.

Additionally, ESP can play a role in network governance, such as adjusting parameters or upgrades. The precise implementation of governance is being rolled out in phases and may further develop as the network grows.

The technology behind Espresso

The core of Espresso is the HotShot consensus mechanism. This is a proof-of-stake system focused on fast finality and scalability. Instead of a single central sequencer, the network relies on a group of validators who collectively decide on the order of transactions.

The network is designed to operate as a shared infrastructure layer on top of multiple rollups. This enables different rollups to process transactions in the same order, reducing the chance of conflicts or failed cross-chain transactions.

Espresso focuses primarily on improving interoperability and decentralization within the rollup ecosystem. The network itself does not execute smart contracts like a standard Layer-1 blockchain does. It orders and coordinates transactions that are executed elsewhere.

The Espresso ecosystem

Espresso works with rollups and Layer-2 projects that need shared sequencing. The ecosystem consists of:

• The Espresso Sequencer Network
• Validators who participate via proof-of-stake
• Integrations with rollup projects
• Tools for cross-rollup coordination

Benefits of Espresso

• Decentralized sequencing for rollups
• Improved coordination between different Layer-2 networks
• Fast finality via HotShot consensus

Disadvantages of Espresso

• Complex infrastructure and must continue to prove itself at scale in practice
• Depending on adoption by rollups

Who are the founders of Espresso?

Espresso is led by a team with experience in cryptography and blockchain infrastructure. The founders include Ben Fisch (CEO), Jill Gunter (CSO), Charles Lu (COO), and Benedikt Bünz (Chief Scientist and co-founder).